Despite Ford anticipating increased profits on its internal combustion and commercial vehicle operations, the automaker also expects its EV business to lose $3 billion this year.
As it continues to spend in raising production and developing next-generation cars on a dedicated EV platform, the automaker said on Thursday that losses from its EV segment, known as Model E, will grow by roughly 50% in 2023 from $2.1 billion last year. Ford’s internal combustion business segment, Ford Blue, and its commercial unit, Ford Pro, are both expected to post earnings before interest and taxes of around $7 billion and $6 billion. Which generated $6.8 billion in revenue and $3.2 billion in 2022.
The business also reported adjusted earnings before interest and taxes (EBIT) of $10.4 billion and a net loss of $2 billion.
Analysts and investors have long believed that the company’s traditional business of producing gasoline-powered cars has contributed to profitability and helped finance investments in EVs and other mobility-related businesses.
But as it switches its financial reporting methodology, Thursday was the first time Ford has publicly broken out data for the three units, as part of a companywide reorganization in 2022. The new reporting format no longer includes information on how the company performed in various continents, including North America, Europe, and China.
According to CFO John Lawler, “we are operating with increased focus, speed, and accountability by changing our organization and how we are reporting financial results.”
Ford reiterated full-year expectations for 2023 of $6 billion in adjusted free cash flow and $9 billion to $11 billion in adjusted EBIT. It added that it was still confident in its predictions that by late 2026, EBIT margins for the Model E will be 8% and 10% overall.
Ford then shared with investors a roadmap on how it would achieve the 8% Model E EBIT objective as well as more information on how each unit performed throughout each quarter of 2022.